Docksider Boats uses a job order cost accounting system. During one month Docksider purchased $153,000 of raw materials on credit; issued materials to production of $164,000 of which $24,000 were indirect. Docksider incurred a factory payroll of $95,000, paid in cash, of which $25,000 is classified as indirect labor. Docksider uses a predetermined overhead application rate of 170% of direct labor cost. The journal entry to record the application of factory overhead to production is:Answer Debit Raw Materials Inventory $153,000; credit Accounts Payable $153,000. Debit Goods in Process Inventory $140,000; debit Factory Overhead $24,000; credit Raw Materials Inventory $164,000. Debit Raw Materials Inventory $195,000; credit Goods in Process Inventory $195,000. Debit Goods in Process Inventory $140,000; debit Raw Materials Inventory $24,000; credit Materials Inventory $164,000. Debit Finished Goods Inventory $140,000; credit Raw Materials Inventory $140,000.

For recording this transaction we debited the goods in process inventory and factory overhead and the material inventory is credited so that the proper posting could be done

aquialaska aquialaska · Answer 2 · 2021-12-28T13:40:14+01:00

The journal entry to record the application of factory overhead to production is Debit Goods in Process Inventory $140,000; debit Factory Overhead $24,000; credit Raw Materials Inventory $164,000.

The journal entry for the following data are as follows,

Goods in Process Inventory A/c. Dr $140,000

Factory Overhead A/c. Dr $24,000

To, Material inventory A/c $164,000

(Being Factory OH application is recorded)

Calculation,

Material inventory = Goods in Process + Factory Overhead

$164,000 = $140,000 + $24,000

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